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 Post subject: EU (quietly) drops demand for bondholder haircut
PostPosted: Sat Dec 10, 2011 11:51 am 
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EU Leaders Drop Demands for Write-Offs -> http://www.bloomberg.com/news/2011-12-0 ... louts.html

Quote:
“As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines,” EU President Herman Van Rompuy told reporters at a briefing. “Or, to put it more bluntly, our first approach to PSI, which had a very negative effect on debt markets is now officially over.”

That marks a defeat for German Chancellor Angela Merkel who wanted to expose bondholders to losses in debt restructurings as her electorate resented writing the biggest bailout checks.

there is more


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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Sat Dec 10, 2011 12:30 pm 
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In the Irish case, I thought the IMF wanted to stiff bondholders but were prevented from doing so by the ECB?


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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Sat Dec 10, 2011 12:35 pm 
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jcsmith wrote:
In the Irish case, I thought the IMF wanted to stiff bondholders but were prevented from doing so by the ECB?

That's what was reported anyway...


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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Sat Dec 10, 2011 5:52 pm 
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The bondholders are the ECB now.

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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Sat Dec 10, 2011 8:14 pm 
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jcsmith wrote:
In the Irish case, I thought the IMF wanted to stiff bondholders but were prevented from doing so by the ECB?

The IMF would stiff all creditors, excepting themselves, equally. That would include the ECB. Debt of private sector companies would not be considered - I would imagine the IMF desire was to not save all the banks and so reduce the overall bailout cost.

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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Tue Dec 13, 2011 2:02 pm 
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Unfortunately, the only route out of the present mess in the medium to long term is to default fully or partially on the bondholders. This will be negotiated on the quiet and may not be announced. Keep an eye on the balance sheets over the next decade.

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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Tue Dec 13, 2011 2:20 pm 
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The words "stable door" and "horse bolted" come to mind. Haven't we paid off the bulk of the bondholders at this stage?


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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Tue Dec 13, 2011 5:49 pm 
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Correct.

Many of the original bondholders have been payed off with money borrowed from the ECB. What is a bond but a debt. If the ECB were stupid enough not to look at the fundementals and have just payed up, they deserve to be burned.

The phrase borrowing from Peter to pay Paul jumps to mind.

As I have said, here and elsewhere on the Pin, the only way out of this mess is to write down debt and move on - wiser it is to be hoped.

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"The problem with Pinsters is that they have a grossly underdeveloped sense of entitlement" - Enoch Root


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 Post subject: Re: EU (quietly) drops demand for bondholder haircut
PostPosted: Wed Dec 14, 2011 10:12 am 
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Bondholders are people too :D

Quote:
Mallow Credit Union president Thomas Dempsey said it had lobbied TDs and party leaders to prevent the "significant loss" being imposed on its junior bonds but to "no avail".

Mr Dempsey told members that the Mallow Credit Union had bought the junior bonds with contracts that guaranteed the capital and had definite repayment dates "long before there was a banking crisis".

"However, with the assistance of the current Government these banks have been allowed to renege from their contractual obligations, to our credit union's detriment," he wrote.


In his defence he bought them before the crisis and did his best to lobby politicians to save his skin. :lol:

Being a bit mean, but it is rare you see an article presenting bondholders in a sympathetic light. Seriously though, we know we own the banks and now we're starting to realise that we also hold some of the bonds. XX

(Apologies for smiley overload :-GC )


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